S/4HANA Cloud Public Edition: Factoring Process without Dedicated Scope Item - App and Process Guida

[byd]

Hello SAP Community,

I have a question regarding the implementation of a factoring process in S/4HANA Cloud Public Edition.

**Background:**
- Customer uses 2-party factoring (immediate payment type)
- Customer wants to use standard functionality WITHOUT the dedicated Factoring scope item (due to additional cost)
- Manual workaround using standard apps and postings is preferred

**Business Flow:**
1. Invoice issued to customer: ¥1,000,000 (accounts receivable created)
2. Factoring company purchases receivable: Cash received ¥900,000 (¥100,000 factoring fee)
3. Customer pays to our bank account: ¥1,000,000 (we hold this on behalf of factoring company)
4. We transfer to factoring company: ¥1,000,000

**Proposed Accounting Entries:**
1. AR creation (Feb 10):
DR: Accounts Receivable (Customer account) 1,000,000
CR: Revenue 1,000,000
→ App: Customer Invoicing (F-22 equivalent)

2. Factoring purchase & cash receipt (Mar 10):
DR: Bank 900,000
DR: Factoring fee expense 100,000
CR: Accounts Receivable (Customer account) 1,000,000
→ App: Manual Journal Entry (FB01 equivalent)?

3. Receipt from customer (Apr 15):
DR: Bank 1,000,000
CR: Deposits payable 1,000,000
→ App: Post Incoming Payments (F-28 equivalent)?

4. Payment to factoring company (Apr 16):
DR: Deposits payable 1,000,000
CR: Bank 1,000,000
→ App: Post Outgoing Payments (F-53 equivalent)?

5. Clearing of "Deposits payable"
→ App: Manual G/L Account Clearing (F1579)

**Questions:**
1. Is this flow technically feasible in S/4HANA Cloud Public Edition? Additionally, are the App IDs I mentioned (F-22, FB01, F-28, F-53, F1579) correct for S/4HANA Cloud Public Edition, or should I use different apps?

2. Specifically, can we clear customer-specific AR (created via customer invoicing app) directly with a manual journal entry including the factoring fee difference as shown in entry 2?

3. If this approach is not possible, what alternative process would you recommend? Please include:
- Which apps to use (with App IDs if possible)
- Accounting entries for each step

Any guidance would be greatly appreciated!

Best regards

[Andrew]

Hi @byd ,

I've not used this flow - but did some research for app equivalences etc. and the output is as below. Please review carefully for your scenario to see if it gets you what you need:

Corrected App Mapping:

• Customer Invoicing: Use "Create Customer Invoice" app (not F-22)
• Manual Journal Entry: Use "Create Journal Entry" app (replaces FB01)
• Incoming Payments: Use "Post Incoming Payments" app (replaces F-28)
• Outgoing Payments: Use "Post Outgoing Payments" app (replaces F-53)
• Manual Clearing: Use "Clear G/L Account" app (replaces F1579)

Detailed Implementation Steps

Step 1: Invoice Creation (Feb 10)

• App: Create Customer Invoice
• Posting:
  • DR: Customer Account ¥1,000,000
  • CR: Revenue Account ¥1,000,000

Step 2: Factoring Transaction (Mar 10)

• App: Create Journal Entry
• Posting:
  • DR: Bank Account ¥900,000
  • DR: Factoring Fee Expense ¥100,000
  • CR: Customer Account ¥1,000,000
• Note: This directly clears the customer AR while recording the factoring fee

Step 3: Customer Payment Receipt (Apr 15)

• App: Create Journal Entry (not Post Incoming Payments)
• Posting:
  • DR: Bank Account ¥1,000,000
  • CR: Deposits Payable/Trust Account ¥1,000,000
• Rationale: Since the AR is already cleared, use journal entry rather than incoming payments

Step 4: Transfer to Factoring Company (Apr 16)

• App: Post Outgoing Payments or Create Journal Entry
• Posting:
  • DR: Deposits Payable ¥1,000,000
  • CR: Bank Account ¥1,000,000

Key Considerations

Account Setup Requirements:

• Create a "Deposits Payable" or "Trust Account" G/L account
• Set up a "Factoring Fee Expense" G/L account
• Ensure proper bank account configuration for multiple cash flows

Process Validation:

• The manual journal entry in Step 2 can indeed clear customer-specific AR directly
• No additional clearing process needed if postings are structured correctly
• Consider implementing approval workflows for manual journal entries

Alternative Approach: If direct AR clearing via journal entry faces restrictions, consider:

1. Use "Post Incoming Payments" in Step 2 with a clearing account
2. Post the factoring fee separately via journal entry
3. Use clearing functions to match the transactions